The story the Global Interconnection Index (GXI) Volume 2 tells about the United States is one of a country with an unmatched history in the development and expansion of Interconnection, but with plenty of growth and innovation still ahead.

The U.S. is the most mature region in the world for digital business, according to the GXI, which analyzes global Interconnection – the direct and private traffic exchange between businesses. The annual report by Equinix estimates that by 2021, the U.S. will contribute 40% of the global installed Interconnection Bandwidth – the total capacity provisioned to privately and directly exchange traffic with a diverse set of participants at distributed IT exchange points. That’s by far the highest share of worldwide Interconnection Bandwidth, an essential enabler of digital business expansion.

The U.S. was an early adopter of digital business, which is a big reason it’s led the way in expanding access to the Interconnection that powers it. The U.S. is also the home base for the largest number of multi-national enterprises.

But despite its Interconnection maturity, there remains significant space in the U.S. for Interconnection expansion. According to the GXI, between 2017 and 2021 the U.S. is expected to have 45% annual growth in installed Interconnection Bandwidth capacity. Overall, the GXI indicates that while U.S.-based companies have been Interconnection pioneers, they will also continue to find new ways to harness Interconnection to scale their digital businesses.

Here’s a closer look at what the GXI Vol. 2 reveals about Interconnection in the U.S.

Leading global Interconnection growth

The U.S.’s projected 40% share of the total global installed Interconnection Bandwidth capacity in 2021 is actually a four-percentage point decline from 2017 but that simply reflects an increasing global reliance on digital technology and its relevance to Interconnection. Interconnection usage in the U.S. looks to remain remarkably strong and is growing exponentially. The GXI estimates the U.S. installed Interconnection Bandwidth capacity will hit 3,318 Terabits per second (Tbps) by 2021, more than four times its 2017 level (see chart below).

Interconnection by Digital Ecosystem Counterparties

The enterprise is fueling Interconnection growth across the U.S. by connecting to counterparties in a variety of digital and industry ecosystems, including network, cloud & IT, financial services, supply chain partners, and content companies. Each counterparty in every one of these ecosystems is a service provider, making enterprise Interconnection to service providers an essential driver of global Interconnection Bandwidth growth in the U.S., and globally (see chart below).

When we break enterprise to service provider Interconnection down by digital ecosystem counterparty use case, interconnecting to Network Providers is tops, as it is projected to account for 2,153 Tbps by 2021 in the U.S. That’s about 65% of the total installed Interconnection Bandwidth, and it’s more than triple the capacity of the next use case, interconnecting to Cloud & IT Providers (626 Tbps). But the growth in the interconnecting to Cloud & IT Providers use case is astonishing, both in the U.S. and globally – it’s projected to nearly double every year in the U.S. between 2017 and 2021 at a 96% CAGR and worldwide at 98% CAGR. The growth is driven by the need for Interconnection to enable hybrid multicloud architectures, which we see as the future of cloud computing because they enable companies to capitalize on the cloud’s efficiency, agility and scalability, while keeping sensitive data secure on-premises.

Interconnection by Industry

Telecommunications is projected to remain the largest U.S. industry in terms of installed Interconnection Bandwidth capacity, at 801 Tbps. That makes sense given the historic and growing imperative for telecom companies to peer and deliver users superior connectivity everywhere. Banking & Insurance ranks second, with a projected installed capacity of 509 Tbps by 2021, at a CAGR of 59%. Among the drivers here: the increasing pervasiveness of digital payment options and the need for insurance companies to use digital technologies to meet consumer demand for more choice and customization. Healthcare & Life Sciences is expected to be the fastest-growing Interconnection industry through 2021, with a 65% CAGR. That industry is starting from a relatively modest base, but the demand for better health care data analysis and protection, along with advances in ways to use that data to customize care, generate insights and improve outcomes are driving growth (see chart below).

U.S. INTERCONNECTION INSTALLED BANDWIDTH CAPACITY (Tbps)

Interconnection by Metro

The GXI projects the top four metros in the U.S. (New York, Washington D.C., Chicago and Silicon Valley) will represent more than 75% of all Interconnection in the U.S. market in 2021. Interconnection Bandwidth growth in those cities is projected to outpace the rest of the country (47% CAGR vs. 40%) with New York leading the way, in terms capacity. The most recent Global Financial Centres Index lists New York as the top global financial center, and the enormous need for Interconnection there will fuel an estimated 1,063 Tbps in installed Interconnection Bandwidth by 2021. That represents nearly a third of the projected Interconnection Bandwidth for the entire United States.

There’s even more to the Interconnection story in the U.S., as well as the other regions covered by Equinix’s global Interconnection and colocation platform. To get the details, check out the Global Interconnection Index Volume 2.